Swiss Supreme Court okays UBS account disclosure to France

By: Helen Burggraf | 17 Mar 2017

Overturning an earlier ruling, Switzerland’s Supreme Court has said the country’s tax authorities may comply with a French request for information about a UBS client’s bank account, even though the original request was based on data that had “probably” been stolen, Reuters, the Society of Trust & Estate Practitioners’ website, Swissinfo.ch and other sources are reporting.

According to the reports, the case dates back to 2010, when an ex-UBS executive based in France compiled a list of some 600 of the bank’s clients and forwarded it to the French tax authorities. The authorities then used this list to determine which French citizens had Swiss UBS accounts that they had failed to disclose for tax purposes.

The matter hit the courts after the French authorities asked the Swiss Federal Tax Agency, or SFTA, to provide it with the details of these clients’ UBS accounts, and one of them, a French national living in Switzerland, objected.

“He [the client] appealed against the disclosure, citing the ‘fruit of the poisoned tree’ doctrine: that administrative requests based on improperly gathered evidence are invalid,” according to the STEP account of the ruling.

Although this argument was originally accepted, the Swiss Supreme Court “has now ruled that the Swiss prohibition on the use of stolen data did not apply in this case”, and that an existing Franco-Swiss double tax treaty “should be interpreted strictly, and that there was no basis for refusing the international request for assistance,” the STEP account continues.

As the Swissinfo.ch news website pointed out in its account of the matter, beginning in 2018, Switzerland will automatically begin sharing bank account data with other countries under the Common Reporting Standard, and double-tax agreements such as the one between France and Switzerland, cited in the UBS case, will no longer be necessary.

Helen Burggraf is the editor of International Investment. A US-trained journalist, she has worked in Rome, New York City and London, covering everything from the fashion and retailing industries to the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.